Executive Compensation, Value and Performance of Brazilian Listed Companies
The aim of this study is to identify the relationship between executive compensation, firm value and performance in Brazil. The literature provides mixed results but most studies show that firms with higher executive compensation tend to have greater value and performance in comparison with companie...
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Brazilian Society of Finance
2014-03-01
|
| Series: | Revista Brasileira de Finanças |
| Subjects: | |
| Online Access: | http://bibliotecadigital.fgv.br/ojs/index.php/rbfin/article/view/7224 |
| _version_ | 1811281059255418880 |
|---|---|
| author | Andre Luiz Carvalhal da Silva Alisson Chen Yi Chien |
| author_facet | Andre Luiz Carvalhal da Silva Alisson Chen Yi Chien |
| author_sort | Andre Luiz Carvalhal da Silva |
| collection | DOAJ |
| description | The aim of this study is to identify the relationship between executive compensation, firm value and performance in Brazil. The literature provides mixed results but most studies show that firms with higher executive compensation tend to have greater value and performance in comparison with companies with lower compensation. We analyze a unique Brazilian database to test this hypothesis. This paper differs from previous studies on executive remuneration in Brazil since it uses dynamic models, estimated by systemic generalized method of moments, to control potential sources of endogeneity. The analysis of 420 Brazilian companies from 2002 to 2009 does not indicate a significant relation between executive compensation and firm value (price-to-book and Tobin´s Q), suggesting that companies that pay greater executive remuneration do not have higher value. Furthermore there is no significant relation between executive compensation and operational performance (ROA and sales growth). |
| first_indexed | 2024-04-13T01:26:45Z |
| format | Article |
| id | doaj.art-b496b6f5b3df472d9c845f89024a804e |
| institution | Directory Open Access Journal |
| issn | 1679-0731 1984-5146 |
| language | English |
| last_indexed | 2024-04-13T01:26:45Z |
| publishDate | 2014-03-01 |
| publisher | Brazilian Society of Finance |
| record_format | Article |
| series | Revista Brasileira de Finanças |
| spelling | doaj.art-b496b6f5b3df472d9c845f89024a804e2022-12-22T03:08:37ZengBrazilian Society of FinanceRevista Brasileira de Finanças1679-07311984-51462014-03-01114481502Executive Compensation, Value and Performance of Brazilian Listed CompaniesAndre Luiz Carvalhal da Silva0Alisson Chen Yi Chien1Pontifícia Universidade Católica do Rio de JaneiroPetrobrasThe aim of this study is to identify the relationship between executive compensation, firm value and performance in Brazil. The literature provides mixed results but most studies show that firms with higher executive compensation tend to have greater value and performance in comparison with companies with lower compensation. We analyze a unique Brazilian database to test this hypothesis. This paper differs from previous studies on executive remuneration in Brazil since it uses dynamic models, estimated by systemic generalized method of moments, to control potential sources of endogeneity. The analysis of 420 Brazilian companies from 2002 to 2009 does not indicate a significant relation between executive compensation and firm value (price-to-book and Tobin´s Q), suggesting that companies that pay greater executive remuneration do not have higher value. Furthermore there is no significant relation between executive compensation and operational performance (ROA and sales growth).http://bibliotecadigital.fgv.br/ojs/index.php/rbfin/article/view/7224Executive remunerationFirm value and performanceBrazil |
| spellingShingle | Andre Luiz Carvalhal da Silva Alisson Chen Yi Chien Executive Compensation, Value and Performance of Brazilian Listed Companies Revista Brasileira de Finanças Executive remuneration Firm value and performance Brazil |
| title | Executive Compensation, Value and Performance of Brazilian Listed Companies |
| title_full | Executive Compensation, Value and Performance of Brazilian Listed Companies |
| title_fullStr | Executive Compensation, Value and Performance of Brazilian Listed Companies |
| title_full_unstemmed | Executive Compensation, Value and Performance of Brazilian Listed Companies |
| title_short | Executive Compensation, Value and Performance of Brazilian Listed Companies |
| title_sort | executive compensation value and performance of brazilian listed companies |
| topic | Executive remuneration Firm value and performance Brazil |
| url | http://bibliotecadigital.fgv.br/ojs/index.php/rbfin/article/view/7224 |
| work_keys_str_mv | AT andreluizcarvalhaldasilva executivecompensationvalueandperformanceofbrazilianlistedcompanies AT alissonchenyichien executivecompensationvalueandperformanceofbrazilianlistedcompanies |